, a. s. August 2017 (updated with 2Q 2017 results)

General Presentation Cautionary statement

Any forward-looking statements concerning future economic and financial performance of a.s. contained in this Presentation are based on assumptions and expectations of the future development of factors having material influence on the future economic and financial performance of O2 Czech Republic a.s. These factors include, but are not limited to, public regulation in the telecommunications sector, future macroeconomic situation, development of market competition and related demand for telecommunications and other services. The actual development of these factors, however, may be different. Consequently, the actual future results of economic and financial performance of O2 Czech Republic a.s. could materially differ from those expressed in the forward-looking statements contained in this Presentation. Although O2 Czech Republic a.s. makes every effort to provide accurate information, we cannot accept liability for any misprints or other errors.

2 Introduction & Strategic highligts Leading retail digital economy enabler in Czech Republic… …fastest growing mobile player & entering fixed in

Leading fixed/mobile operator 4,903k Mobile 654k fixed voice lines

Leading fixed BB provider 771k xDSL (ADSL, VDSL) & LTE

Fastest growing Pay TV provider 259k Pay TV (IPTV, OTT, Multi) No. 3 mobile fastest growing 1,903k Mobile

O2 Czech, O2 Slovakia, O2 TV, O2 Family, O2 IT Services, others*

*Tesco Mobile CR, ICA, Bolt Start Up Development, eKasa, O2 Financial Services, O2 Business Services Slovakia 4 Figures as of 30th June 2017 From Telefónica to PPF… …Separation created value

PPF acquires Separation majority by spin-off stake from Telefónica Fixed & mobile transport/access network and infrastructure Jan 2014 June 2015

. Focus & Flexibility . Less regulation . Light financial profile (assets, capex)

5 Streamlining the business… …resulted in turn around of our financial trends More focus on what we do Accelerated what we do

. Mobile revolution (2013) . 4G (LTE) 99% coverage[1]… . Fixed revolution (2016) . …and monetized trend

. New proposition . O2 TV for all . New features . Sport bars & pubs

We do things differentially We entered new businesses

. O2 Spolu – convergent bundle… . Hardware insurance . …mobile voice, data & Pay TV . Travel insurance

. More content… . Start-up accelerator . …More channels . Electronic sales reporting solution

6 [1] based on CTU methodology, within Top 5 in Europe We are starting up new business activities… …to compensate pressures in traditional business

. Electronic sales reporting - new legislation

eKasa . … market leader after first two waves…

. …one-off hardware revenue, recurring service fee

. smart travel: the only postpay travel insurance on the market

Insurance . handsets & tablets: for newly sold hardware

. 200k insurance policies milestone in only 18 months

. Minor cash investments into advanced start-ups

. Typically own O2 experience before investment

. Not only financial contribution, but also O2 ecosystem

7 O2 with unique pay TV proposition… … bringing multidimensional customer experience Anytime Anywhere For all

Any connectivity O2 TV Retail distribution

Free-to-air distribution Full paid content provided via HbbTV

Unique content

8 Strategic commercial initiatives & Performance Highlights in 1Q 2017

9 We confirmed WTTx/5G spectrum leadership… …and secured O2 brand minimum until 2022

. 40 MHz block in 3.7 GHz spectrum acquired for CZK 203m …

. … suitable for WTTx in areas with insufficient xDSL coverage…

. …leveraging on experience in Slovakia (3.5 & 3.7 GHz) Current spectrum allocation[1]

40 [1] 3.7 GHz TDD 25 25 40 2.6 GHz TDD

Current [2]

O2 TM VOD

. O2 brand license agreement extended by 3 years (Jan 2022)…

. …another 5-years extension (till Jan 2027) available…

. .. partnership with Telefonica till at least Jan 2022

. …related CZK ~900m prepayment in 4Q 2017 10 [1] following recent 3.7 GHz spectrum auction (new spectrum to be paid for and assigned in 2H 2017); [2] 450 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,600 MHz FDD Home unlimited broadband proposition well accepted… …unique fixed/mobile convergent product launched

. Unlimited BB available to 99% of households… Gross Adds . … technology agnostic (DSL & LTE)…

. …with guaranteed 20Mbps speed 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

. O2 Spolu – flexible family convergent bundle…

. …3 unlimited mobile voice & SMS with flexible mobile data (3 to 10 GB[1]) bundled with Pay TV

. Paid data packages upgraded in major tariffs… 39% LTE penetration . …mobile data traffic up by 2/3 y-o-y… 59% . …data monetization accelerates… smartphone penetration . … and mobile ARPU keeps growing 11 [1] per SIM LTE TDD wireless broadband & Pay TV launched in Slovakia… …mobile ARPU up 2% year-on-year on the back of strong data

. 3.5 & 3.7 GHz spectrum acquired in 2015/2016… . …to build WTTx network for broadband & Pay TV services.. . …commercial launch in 2Q in first 230 towns & villages in all regions

. LTE handset sales focus… in-house instalment model… 40% LTE penetration . …combined with new data focused proposition… . … data customer base +14% & traffic +62%... 59% smartphone . and data successfully monetized (revenue[1]: +37%)… penetration

1H 2017 (CZKm, y-o-y[1]) Solid revenue growth driven by data & hardware . 9,1% . B2B business dilutes EBITDA margin by 1.2 p.p.

[2] 3 467 . Total EBITDA margin 32.6% 2.7% . Positive contribution to Group financials 1 131 Revenue EBITDA 12 [1] year-on-year growth rates in constant currency (EUR), including O2 Business Services; [2] including national roaming costs Financial Performance GeneralJanuary characteristics– June 2017 Growing group financials at all levels in 1H 2017…

…revenue growth driven by mobile data, O2 TV and hardware… Change CZK millions Jan-June 2017 1H17 /1H16 Operating Revenue 18,487 +1.4% CZ Fixed 5,350 CZ Mobile 9,785 Slovakia[1] 3,466 EBITDA 5,093 +0.8% EBITDA margin 27.5%

Net Income 2,633 +3.2% Free Cash Flow[2] 2,182

Operating Revenue EBITDA

0,8% 1,4% 5 053 5 093 18 223 18 487

1H 16 1H 17 1H 16 1H 17 14 [1] including O2 Business Services; [2] FCF in 2H 17 will be impacted by 3.7 GHz spectrum payment (CZK 200m), brand prepayment (CZK ~900m), intensified network capex (2G, 4G) and hardware installment sales funding in Slovakia Fixed voice declining due to fixed to mobile substitution… …B2B segment still under pressure

CZK millions (% change y-o-y) -5.3%

5,651

-120 -17 -55 5,350 (-8.6%) (-0.7%) -25 -22 (-6.6%) -62 (-4.8%) (-19.2%) (-25.6%)

1H 16 Voice BB & Pay TV ICT Data Hardware Other[1] 1H 17 15 [1] termination of O2 network monitoring contract Double digit growth of data, financial services, and HW revenue … …more than compensating B2B pricing & roaming impact

CZK millions [1] (% change y-o-y) Slovakia Mobile Revenue +8.5%

Czech Mobile Revenue +3.5% +90 +7 379 +11 (+12.8%) +70 (+1.0%) (+1.7%) 9,785 9,453 +16.1%)

-156 -70 (-3.6%) (-14.9%)

+153

1H 16 Voice Messaging Data Financial S. Interconnect Hardware [2] Other 1H 17

16 [1] Key drivers: Data: +37%, Hardware: +33%; O2 Slovakia, growth rate in local currency (EUR); [2] incl. electronic sales reporting HW Cost base under control; with Czech costs flat year-on-year… …while Slovak up 11% due to higher HW costs & roaming

CZK millions 0.0% (% change y-o-y) +1.6% +11.3%

+172 +79 +23 (+8.9%) (+4.4%) (+7.1%) 13,420 13,208 -31 -1 Mobile (-6.9%) (0.0%) -30 HW costs (-0.4%) +245 Insourcing saving -225

Commissions IT Call centers -121 -31 -73

1H 16 Costs of Service Commercial Costs Marketing Personnel NW & IT repairs Other[1] 1H 17 Expenses and maintenance

17 [1] Taxes other than income taxes, provisions and fees, Rentals, Buildings, Vehicles, Consumables, Consultancy, Billing, Collection, Call Centers, management fees and other; including Internal expenses capitalized in fixed assets Low capex profile… …investments directed to 2G/4G in SK & IT transformation

CZK millions CAPEX/ Revenue

6.7%

6.2% 1 232 . Slovakia: 1 129 . 4G rollout (also in rest of 2017) 357 10.3% 251 . Mobile network expansion (peak in 2H 2017)

. 3.5 & 3.7 GHz – LTE TDD (BB + Pay TV)

5.8% . Czech Republic: 878 875 . IT transformation (peak in 2H 2017)

. Mobile core NW upgrade

. 2H 2017: 450 MHz & 3.7 GHz spectrum

1H 16 1H 17 18 CZK 6.4bn of 2016 shareholder remuneration paid… …new CZK 3.5bn debt withdrawn

30 Jun 17 CZK millions 31 Dec 2016 30 June 2017 /31 Dec 16

Non-current assets 22,071 21,762 -1.4% - of which intangible assets 16,515 16,044 -2.9% - of which property, plant & equipment 5,075 5,023 -1.0% Current assets 11,235 9,908 +11.8% - of which cash & cash equivalents 4,137 2,884 -30.3% Total assets 33,306 31,671 -4.9% Equity 17,505 13,104 -25.1% Non-current liabilities 7,382 10,850 +47.0% - of which financial debt 6,976 10,457 +49.9% Current liabilities 8,419 7,761 -8.4%

19 CZK 10.5bn debt utilized out of CZK 15.5bn capacity… …Net Debt to EBITDA maintained at low level

CZK millions

Debt Cash, Net Debt

15 000

3 500 0.72x

2 884

12 000 10 478 10 491 7 593

Term + Schuldschein Utilised Cash Net Debt EBITDA revolving 30-Jun 2017 (CZK, 2020) (CZK/EUR[1], 2022/2024)

20 [1] CZK 3,000m, EUR 20m 2016 Shareholder remuneration

21 Share premium distribution on top of 2016 regular dividend… …offering 8% total shareholder return[1]

. DPS: CZK 17 Total shareholder remuneration Regular . … 98% of net profit 2015 2016 Dividend [2] . In line with dividend policy … 4

. On top of regular dividend Share Premium 21 . Not one-off, but mid-term intention 17 distribution 16 . CZK 4 per share

Divi Divi Share pr. Total Up to CZK 6,515m

. up to 10% in 5 years.. Share Buy Back . 7.1m, i.e. 2.3% shares… already repurchased… . …for total acquisition cost of CZK 1,787m…

22 [1] based on closing price on 10th January 2017; CZK 273.7, [2] distribution of 90% to 110% standalone net profit Back up O2 is market leader in Czech Republic (CZ)… … and fastest growing player in Slovakia (SK)

Strong position in both CZ and SK market Solid GDP growth and retail purchasing power

. Strong link to . Market leader in CZ German economy . GDP growth above EU level . Fastest growing . Unemployment in CZ player in SK at the lowest levels in past 20 years

Market leader in the Czech Republic Fastest growing player in Slovakia

Mobile Service Revenue Fixed Service Revenue(1) Mobile customers Mobile revenue CAGR 2013–2015(2) 800 3 000 3% 400 2 500 1% 600 ≈

300 1.7x 2 000 <10% -1% . 400 1 500 -3%

200 ths EURm EURm 1 000 -5% 200 100 500 -7% 0 0 0 -9% O2 T-Mobile O2 T-Mobile O2 T-Mobile Orange T-Mobile O2

Note: (1) O2 also has 1.7x higher broadband subscriber base than UPC, the largest broadband competitor; (2) Data for Orange are best estimate 24 Post separation setup… …Two strong independent companies

PPF stake: 81.06% PPF stake: 100.00% . Independent conduct solely on commercial basis . Independent IT, corporate bodies, business plan and goals O2 CR x . CETIN key vendor of O2 CETIN . Commercial relationship established & working… relationship . … 12 main business contracts on commercial as well as regulated basis . Fixed – based on reference/regulated price . Mobile – open book principle @ CZK 4.4 bn. for 7 years . Data centers, Roaming, Collocation, etc.

. PPF considers O2 as financial investment, i.e. not as part of PPF Group O2 CR x . PPF does not interfere with daily management, O2 does PPF not pay any management fee to PPF relationship . PPF not seeking to squeeze out minorities, supports 25 increase in O2 liquidity and free-float Reasonable commitment for pro-growth areas… … with further potential

Fixed charge & commitment (illustrative) CETIN’s wholesale FBB offer (illustrative) TIME commitment other X tv uncommitted voice 650k/ 7 years

20% VOLUME VOLUME

fbb 80% 7 years commitment (650k) commitment

Mobile charge & commitment (illustrative) 7 years • Open book principle 2G & 3G CZK 4.4bn • 7 years commitment & annually LTE • Additional savings shared

26 Improving coverage & capacity of mobile data network… …to monetize future increasing demand for mobile data

Pioneers in active network sharing • Joint rollout (3G: 2011, 4G/LTE: 2014) • 2G/3G consolidation since 2013 (40% target) …execution to be continued by CETIN

LTE outdoor coverage LTE densification & capacity improvement 99% 80%

• ~2.5 thousand new LTE sites in 2016/17

32% • 2CC (4GLTE+) already available in 99% of (Brno to be covered during 2017) • 3CC available in selected parts of two major cities 5% • First 4.5G commercial launch (up to 1.2Gbs) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016

27 Superior fixed broadband coverage[1]… … with further increase in speeds Fixed broadband infrastructure[1] [2] Household coverage [1] 90%

33%

O2 current proposition Speed upgrade through: . 1/3 of customers with >80Mbps . Remote DSLAMs (PREMIUM) . Vectoring . 2/3 with 6 to 20Mbps . Bonding

. 5/2017 – SUPERFAST (100 to 250 Mbps) . 2H/2017 – upgrade of PREMIUM from 80Mbps to 100 Mbps [1] through CETIN 28 [2] 20 million kmp of cables Investor Relations contact Investor Relations contacts

Jakub Hampl Head of Investor Relations

T: +420 271 463 935 E: [email protected]

[email protected] www.o2.cz/spolecnost/en/investor-relations/

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